Versions of roi, Financial Accounting

A huge number of variations of ROT are determined in practice, based upon how "Investment" and "Return" are explained "Investment" may be explained to comprise any of the subsequent:

1.  Gross capital employed:              

Net fixed assets + total current assets + other assets Ratio Analysis

2.  Net capital employed:                

Net fixed assets + net current assets + other assets

3.  Proprietors' net capital:               

Total assets - (Current liabilities + long-term employed borrowing + any other outside funds)

4. Average capital employed:       

Opening + closing balances of capital, reserves, accumulated depreciation and borrowings/2

As the same, 'Return' may be explained to include any of the subsequent:

1 Gross profit

2 PBDIT that is Profits before depreciation, interest and taxes

3 Profits before depreciation, interest and taxes but excluding capital and extraordinary nary profits: PBDIT

4 PBT that is Profits before tax

5 Profits before tax but excluding capital and extraordinary profits as: PBT, the subsequent versions of ROI are utilized in practice as:

1. Gross Return on Investment =Gross Profit/Total Net Assets

2. Net Return on Investment = Net Profit/Total Net Assets

3. Return on Capital Employed that is (ROCE)                                                              

= Profit before tax + Interest/Net Worth+ Interest bearing debt.

4. ROI (based on PBDIT) is = PBDIT as per cent of average capital   Employed

5. ROI (based on PBT)

= PBT average of capital and Investment Analysis as percent of reserves

Posted Date: 4/9/2013 2:10:42 AM | Location : United States







Related Discussions:- Versions of roi, Assignment Help, Ask Question on Versions of roi, Get Answer, Expert's Help, Versions of roi Discussions

Write discussion on Versions of roi
Your posts are moderated
Related Questions
The following table represents the demand for a product for the years 1990 to 2007: a.    Develop a linear trend line and use it to predict the quantity demanded for 2008,

Company X is presumably doing well. The corporation's balance sheet last September 31 can be summarized as follows: Total Assets

how to account cst collected

under gaap, are proceeds from capital lease obligation reported in the statement of cash flow and why

Tyler Smith has worked in an upholstery shop for 10 years. Tyler's wages were $20,000. Lately, Tyler has been unhappy with the shop's owner. Convinced that he could run an upholste

As an expense and an asset This approach tries to resolve the differences between the two methods by ensuring that we show an asset that may materialize or crystallize and at t

Using CAPM's formula, Return on equity = Risk-free rate + Beta*(Expected market return - risk-free rate) With the given information, Return on equity = 1% + 0.55*(8% - 1%)

An investor holds a bullish view for the equity market over the next twelve months and wishes to recalibrate his portfolio to reflect this view. The investor's portfolio consists o

Define reasons that influence a firm's degree of transaction exposure? What reasons influence a firm's degree of ‘transaction exposure' in a certain currency? For each reason d

How would the following errors affect the account balances and the basic accounting equation: assets = liabilities + owners' equity? How do the misstatements affect income? 1. The